Crypto Security: Fantom Foundation Awards $1.7M Bounty for Preventing $170M Drain.
Fantom Foundation awards $1.7M bounty for preventing $170M drain

Crypto Hack Causes Fantom Foundation to Take Action

On October 17th, the Fantom Foundation experienced a hot wallet hack, with an unknown attacker stealing 1% of the Foundation’s funds. As a result, the Foundation stopped using some of the affected wallets and reassigned them to a Fantom employee, making it a “targeted attack.”

A security researcher then found an additional potential risk associated with the hack and alerted the Fantom Foundation. This vulnerability was associated with a dormant admin token for Fantom’s FTM contract on the Ethereum blockchain, which could have allowed the hacker to mint a portion of Fantom (FTM) for themselves.

The Fantom Foundation estimated that the discovered vulnerability could have allowed the hacker to drain $170 million worth of crypto value. This estimate is based on the token price at the time of the hack, although the market’s insufficient liquidity to absorb the tokens fully was not taken into consideration.

Following the incident, the Fantom Foundation has taken steps to eliminate this significant vulnerability and ensure the security of their crypto trading platform.

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The Fantom Foundation announced that the vulnerability was “mitigated quickly” and rewarded the unnamed researcher with $1.7 million in recognition of the contribution. The announcement also stated that the Fantom Foundation did not immediately respond to Cointelegraph’s request for comment.

Despite the Fantom Foundation suffering a half a million dollar hack one month ago, the Fantom token has seen a steady increase in value over the past four weeks. According to CoinGecko, the FTM token has grown 82% since Oct. 17, currently trading at $0.31. The token has also appreciated 78% over the past year.

The Fantom network, launched in late 2019, is a blockchain protocol that enables users to build and deploy decentralized applications (DApps). The Fantom Foundation’s Opera is a permissionless blockchain compatible with the Ethereum Virtual Machine, which allows users to interact with the Fantom network on MetaMask, a leading self-custodial crypto wallet.

The recent $550,000 hack on Fantom is not the first security breach the Fantom Foundation has faced. In July 2022, Fantom was hit with a massive multichain bridge hack, resulting in the loss of $126 million worth of cryptocurrency. Andre Cronje, the creator of Fantom, later revealed that the Fantom team had been misled about the level of security of Multichain, which ceased operations in mid-July 2023.

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